This post from Cortney Jansen. Cortney is 29, works as an engineer in the Bay Area and has been reading GRS for a couple of years now. She's in the third stage of personal finance: debt-free and trying to figure out the best balance for multiple savings goals. This postis part of the Reader Stories series. Some reader stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income.

Ever since I discovered Get Rich Slowly, I've wanted to submit a Reader's Story. However, I struggled to find a topic that GRS readers might find relevant. I'm debt-free — and only ever had student loans, which were easily manageable. Both cars are paid off, and there's a fund in place for the next one. I don't own a home, but I'm saving for a down payment and in no rush to buy one. As a result, I have no amazing tale about how I racked up all this debt and, through diligence and penny-counting, paid it off. My story — one in which spending less than I earn is easy — is boring and probably even off-putting to some. So instead, I became a passive GRS member, reading articles by other people, occasionally commenting, and always wondering, “Will there ever be anything I can actually contribute?”

The year of the negotiation

Since I knew I'd eventually need a new car and would want a house, I needed to save for those purchases. As I started to evaluate how much to set aside, I realized that these two purchases would be much cheaper if I knew how to negotiate. Although I've haggled in the past (mostly for souvenirs in foreign countries), it was nothing compared to the skills I would need to buy a car or a house. Also, I read several articles about how women rarely negotiate salaries. I eventually realized that until I learned to negotiate, I was costing myself money, potentially tens of thousands of dollars over the years. I needed to become a confident negotiator and decided 2012 would be a good time to start. As the months went by, I realized I might actually have a story of interest to GRS readers. And so, I present to you: The negotiations of 2012.

Situation #1

What happened: In an interview for a new job, I was asked about my salary requirements. I said something to the extent of “Oh, I'm not sure. Maybe between [this range].” I may have even given my current salary. In short, I broke every negotiating rule I've ever heard (and probably even a few more).

I went home cursing myself and promptly hopped online to learn what I should have said (iwillteachyoutoberich.org was very helpful here), swearing that I would weasel my way out of this if it was the last thing I did. When I got the offer, the salary was unsurprisingly at the bottom of the range I'd mentioned. I thanked them for the offer and said I was excited about the opportunity. Then, I explained that the salary was lower than I had hoped, and even though I had given a range in the interview, I did so without knowledge of the other benefits (vacation, 401k matches, etc). I listed a few specific benefits that were less than my current job and said that I believed these cuts justified a higher salary. We agreed on 10 percent more than the initial offer.

What I learned: If you're like me and usually give the first number, you must practice beforehand! If necessary, memorize key phrases (e.g. “Well, it depends on a number of things, and at this point I'd rather focus on what I can offer in this position.”) that you can use when asked about your salary requirements. If asked about your current salary, try something like, “My current company policy requires employees to keep our salaries private” (assuming this is true). If you get an offer that you'd like to negotiate, always start by thanking your potential employer for the offer and emphasizing how excited you are to join the organization. Only then should you talk about what you'd like to change in the offer. Finally, remember that making a major mistake like I did doesn't necessarily mean you've lost all negotiating options.

Situation #2

What happened: I made a reservation at a major hotel chain and ended up canceling the room within the time allowed by the cancellation policy. Even so, the charge still appeared on the credit card bill. After calling and getting them to cancel the charge, I asked if I could get something for my time and effort. The customer service representative asked what I wanted, and I said at least $25. After speaking with her superior, she offered me 5,000 points to redeem online. I countered with 10,000, and we ended up at 7,500.

What I learned: I have got to stop giving the first number! More importantly, if you're ever offered points or something similar, understand their real value. I later learned that all rewards were a minimum of 6,500 points. Since I never stay with this hotel chain, her initial offer of 5,000 points would have been useless. Finally, it never hurts to ask — I ended up $25 richer after about five minutes on the phone.

Situation #3

What happened: I found a product available online only at Company A and Sky Mall. Although I really want it, it cost $40, and I couldn't find a coupon online anywhere. Shipping was outrageous, and Sky Mall actually ended up being $1 cheaper than Company A. I called Company A, explained that I could get it cheaper at Sky Mall and asked what they could do to encourage me to buy it from them. They offered me free shipping, and I ordered it immediately.

What I learned: I wasted more time looking for coupons online than I spent on the phone. If a quick online search turns up nothing, try calling the company. Remember, $8 for you is a lot more than it is for them.

Situation #4

What happened: The center of all negotiating — the flea market! I have four books in my hand, which total $11. I actually didn't want to negotiate this — less than $3 for a used book seemed like a bargain. But at a flea market, you must bargain, right? I offered $9 and we settled on $10.

What I learned: Even in the perfect environment, negotiating doesn't always feel right. Sometimes, this is probably a valid emotion (after all, is it really worth negotiating over $2?), but it takes practice to learn when this is true.

Now, of course, none of these stories required hours of arguing, and most of my results came from just asking. Is it truly negotiating? Probably not, but it is the first step in negotiating — learning that it's okay to ask for a discount. Until you feel confident asking for something, it's hard to be comfortable negotiating for it. Negotiation also requires loads of practice. Try practicing in front of your spouse, a friend or your mirror. And remember that although it may seem silly to ask for a $2 discount, every time you do so, it's practice for when you're ready to buy your next car or other situations where negotiating really matters. Who knows, you may even be shocked to discover that negotiating is fun.

Author: GRS Reader

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There are 34 reader responses to "Reader Stories: Adventures in negotiating".

Michellesays

Great post! I need to work on my negotiating skills. I was on hold for over an hour with toys r us around the holidays. My 10% off wasn’t working on the $10 item that I was purchasing online. I realized that I was spending over an hour for $1.00 and hung up the phone!

Thanks for sharing your tips! I think negotiating one’s salary is especially important (this coming from someone who nearly got burned compensation wise with my first job!) I like how you recovered from that initial mistake — that’s a good tip to keep in mind.

I hate being asked about my current salary because our company has had a wage freeze on since the recession. Anyone have any good tips for deflecting that question?

You can deflect the question by saying something like company policy doesn’t allow you to discuss current salary outside the organization. In fact, when I was hired recently at a Fortune 500 company, I had to sign a non-disclosure agreement regarding my wages.

I, too, liked how she recovered. My husband has to hand in an employment application when he goes for an interview next week, and the app asks for “salary requirement.” Any tips on handling a salary question when it’s on an application? We’ve been looking up industry standards in our area, but it’s hard picking a number that isn’t too high to put them off or too low so you feel like you could have gotten more. I wonder if putting down a range instead of one number would be best, then using the negotiating technique mentioned in the reader story.

When putting your current salary, add in all your benefits as a monetary value if you can. So if you get 7% profit sharing or 2% in 401k contributions or you got a $2k bonus at the end of the year, add all of that in. That way if the next company’s benefits are not as good, you will not be losing money.

I really enjoyed this article especially because it really showed me that it’s worth “practicing” to ask for things on a small scale in order to help train ones “negotiation muscles” for the big things. I’m going to remember to do this more! Thanks!

This is a great reader story. Negotiating is a skill we all can benefit from. I have gotten a 10% raise in salary, and 13% off a car’s sticker price from successful negotiations. If you are new to negotiating, my best advice from what I’ve experienced is that it never hurts to ask.

I hate negotiating because I’m not the best at talking to people but I often come up with the strategy and I’m lingering in the background while my husband does the talking.

We recently bought a mattress. Right as we were on the phone purchasing the item we saw in the store earlier, I noticed the price online was cheaper than in the store. I grabbed my husband and showed him. Not only did they lower the price but threw in free shipping as well.

Salary is a little more difficult for me because a lot of places in field have a set standard that they go by and that’s it.

Great post. I was chatting to a friend of a friend yesterday, and he’d managed to knock off Â£30,000 from the asking price of a new flat just by being patient. He waited until only a few flats remained in a development, made an offer he could afford and said he would close within a month. The developers were only too keen to sell and accepted the offer.

I learned from him that it pays to be patient, have a plan (mortgage / opportunity fund) in place and to know when to make an offer!

Negotiating is something I have mixed luck with. I tend to be pretty good at it for big ticket items – my negotiations on a couple different properties saved us about $10K altogether, but I really have to be sure that I’m not asking for something that’s unfair or below market rates to be able to get behind it.
But asking for more money is tougher for me. I need to get better at salary negotiations since companies usually give me exactly what I ask for the first time (which lends me to believe I may be selling myself short there…).

This is a great post, and as a recruiter, I agree that it’s important to negotiate well. If you’re bad at it, you come off as difficult. If you’re good at it, you retain the goodwill of the opposite party while still making progress toward what you want. The only thing I would add, as someone who has worked dealing with customers for 7 years, is if you are a repeat customer for a company (such as a season ticket holder for a sports team), pick your battles. There is always that one person who wants more and asks for more, no matter what they’re already getting. Most companies keep databases of customers, and make notes of the notorious ones. You want to avoid being one of them, in order to get voluntary, long-term good service.

I hate negotiating! I know it’s something you’re supposed to do. But I would rather just pay or go without. It just seems like a lot of hassle for a thing. I do it at flea markets and garage sales though.

I do better on the phone than with in person negotiating. They can’t see the uncomfortable grimicing faces I am making when I am stating the price I want.

I stink at in person negotiations. Always trying to be cool and calm and keep the urge to vomit away takes all of my energy and thoughts and I just end up saying OK to whatever the guy in the office at the car dealer says.

I am super uncomfortable negotiating and I too have found that having some stock phrases really helps when I’m put on the spots.

For situations where I’ve been inconvenienced or disappointed (like the hotel example), instead of giving a number, I try something like,”I’m sure your company has policies for dealing with customer service issues like this one. What are you able to offer me? [or, What do you typically provide in a situation like this?” Sometimes they push it back to me, but most of the time, they come up with something, so I’ve forced them to throw out the first number, and to give me an idea of the kind of currency the want to deal in, dollars, points, products, coupons, etc.

Excellent post. I’ve had considerable success negotiating the price of a new car, but usually don’t for other things. I just read that furniture is marked up as much as 100% because the sellers expect people to ask for discount. That really surprised me. Has anyone had any experience with furniture or other new merchandise?

Susan, I’ve had considerable success negotiating when buying furniture and even appliances. You’d be surprised at how willing to negotiate some stores, even some of the big box stores are. Any large purchase I make usually starts with something along these lines, ” Look, I’m really interested in xxxxxx but the price is somewhat higher than what I have budgeted. Is this the best you can on this?”. If they say yes then we start the haggle, if no, I walk away.

The salary negotiation for my first job was a disaster. I ended up getting paid way less than what I deserved as a person with an advanced degree. But I’ve learned my lesson to negotiate proactively in the future. I guess the key is preparation. Knowing what the industry standards are for a position you are selected and for your educational qualifications helps you know what you deserve. Once you are informed, you can confidently negotiate with the Human resources personnel. If you are blissfully ignorant, especially for new grads joining the workforce for the first time, people can take you for a ride.

I got promoted last year and due to my position in the company (accounting/finance) I had access to the budgeted salary for all positions. I made the mistake of saying “well I know the budget is X so I want at least that…” I should have added 20%-25% to that number and explained that I knew it would take 3-4 months to fill my old position and I would be doing both jobs until they found a replacement. Lesson learned.

Great post. I’m going to make becoming a better negotiator my New Year’s resolution for 2013. I have 2 nephews that are great at it and I’m going to get some mentoring from them! Thanks for the inspiration.

I’ve been surprised at some of the places that will negotiate. When I bought my appliances I shopped around and ended up at one of those warehouse outlet type places and they price matched the hardware store (even though they had the better model), I got some free upgrades in the fridge, they took a little off the total because I bought 3 items… in the end I spent less than I would have at a regular retail store but got better merchandise.

Really liked this post! Definitely some worthwhile information to consider especially in regards to negotiating salary. Its true that women often don’t negotiate their salary and even make this same mistake of giving a number at an interview. All great tips here.

So sorry that I was unreponsive when my post when up – I’ve been out of town for a funeral and had minimal computer time. Anyhow, thank you so much for the comments – it’s been great reading through them all, and I’m glad so many people enjoyed the post!

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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